It's a cloudy confusing picture... the best word I can use to describe it is ridiculous.

Imagine for a second if stock brokers located in individual states behaved like horsemen... Suppose instead of advertising their services on TV they had instead lobbied their Senators, Assemblymen, and Governors for legislation making it illegal for you and I to buy and sell AAPL or MSFT through an E-Trade account.

In 2007, horsemen and track management in AZ lobbied for a law that made it a felony to bet races from "outside the racing enclosure." (Language in the statute applies equally to both bet taker and bettor.)

To the best of my knowledge, the law is the only one of its kind in the US. No other state has criminalized betting a horse race to the degree that Arizona has.

The other state with a recent law containing language that specifically mentions ADW wagering is Texas (although the wording in that law puts the burden upon the bet taker more than the bet maker.) FYI, several weeks ago Twinspires filed an appeal in Federal court (and as I type this) the outcome of that appeal is still pending.

Michigan has a statute that makes it illegal to sell lottery tickets online. However, "horsemen" and track management there somehow persuaded the Michigan Attorney General's Office to send threatening letters to ADWs - who for the most part - decided the path of least resistance was to close accounts belonging to Michigan residents and issue refund checks.

Other states such as CA, VA, CO, WY, WA, PEN, NY, NJ, MN, IL, and AR have enacted statutes containing language that can best be described as "source market fee" - meaning that the player's handle is "taxed" at a set percentage rate. This doesn't preclude the player from betting horses through and ADW per se but the percentage rate or "tax" is high enough that that the player is prevented from getting rebates on his or her handle.

Still other states have no laws on the books addressing ADWs one way or the other. In such states individual ADWs have made their own decisions as to whether or not they will accept residents of the individual state as a new customer.